Trading in the tax-exempt market was up Tuesday morning, though traders said prices were not necessarily moving higher or lower.

"Munis are sideways," a New York trader said. "There are still buyers out there though, but the market is just not moving up or down."

Indeed, munis were steady Tuesday morning, according to the Municipal Market Data scale. On Monday, the two-year closed at 0.31% for the sixth consecutive trading session. The 10-year yield dropped five basis points to 1.65%, setting a record low as recorded by MMD. It beat its previous record of 1.67% set Jan. 18. The 30-year yield also plunged five basis points to set a record low yield of 2.81%, beating the previous record of 2.86% set Friday.

By finishing stronger Monday, munis extended the streak of trading flat or firmer into 21 consecutive sessions. Since this most recent rally began on June 22, yields on the 10-year have fallen 21 basis points while the 30-year yield has plunged 35 basis points.

The Treasury yield curve was flatter as yields on the short end rose while yields on the long end fell. The two-year yield rose one basis point to 0.23% while the 30-year yield fell one basis point to 2.51%. The benchmark 10-year was steady at 1.44%.

In the primary market, Wells Fargo Securities is expected to price $322 million of Los Angeles Department of Water and Power water system revenue bonds, rated Aa2 by Moody's Investors Service and AA by Standard & Poor's and Fitch Ratings.

Morgan Stanley is expected to price $280.1 million of taxable and tax-exempt Mississippi general obligation refunding bonds. The first two series, $57.1 million of taxable GO refunding bonds and $43.7 million of tax-exempt GOs, are rated Aa2 by Moody's, AA by Standard & Poor's, and AA-plus by Fitch. The next two series, $100.6 million of Libor index bonds for the Nissan North America Inc. project and $78.7 million of SIFMA index GO refunding bonds for capital improvement projects, are rated Aa2 by Moody's and AA by Standard & Poor's.

In the competitive market, Pennsylvania is expected to auction $361.3 million of GO refunding bonds, rated Aa2 by Moody's, AA by Standard & Poor's, and AA-plus by Fitch.

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